How to verify a CIS subcontractor

What is CIS verification?

It is how you find out from HMRC what to take off a subcontractor’s pay. GOV.UK: Before you can pay a new subcontractor, you’ll need to ‘verify’ them with HMRC. In CIS340, HMRC’s guide to the scheme: Verification is the process we use to make sure that subcontractors have the correct rate of deduction applied to their payments under the scheme.

You, the contractor, do the check. A subcontractor cannot verify themselves, and there is no list of registered subcontractors to look them up in.

Verifying is the first of six monthly jobs for a contractor. The rest are in how CIS works.

What details do I need to verify a subcontractor?

Your own details first:

• your Unique Taxpayer Reference (UTR)
• your HMRC accounts office reference
• your HMRC employer reference

Then theirs, which depend on the type of business:

• A sole trader: their name, UTR and National Insurance number
• A limited company: the company name, the company’s UTR and its company registration number
• A partnership: the firm’s name and UTR, the name of the partner, and that partner’s own UTR or National Insurance number

Two things catch people out. A sole trader’s National Insurance number must be the real one: you cannot verify temporary numbers, which start with ‘TN’ or 2 digits. And HMRC also asks for Confirmation that a contract has been agreed with the subcontractor or that you’ve formally accepted a tender for work under a contract.

Source: GOV.UK, verify subcontractors, which adds: The details you provide to verify the subcontractor must exactly match the details the subcontractor used to register with HMRC.

How do I verify a CIS subcontractor?

Online, through HMRC or your software. Step by step:

1. Check whether you need to. Every new subcontractor needs verifying. Someone you have paid before only needs it if they are outside the two tax year window.
2. Get their details exactly as they registered them. Ask for their legal name, not a trading name, and copy the UTR carefully. One wrong digit and HMRC cannot match them.
3. Sign in to the CIS online service, or open your CIS software. The online service is free and uses your HMRC business tax account, with CIS added to it. If you need to verify more than 50 subcontractors you’ll need to use commercial CIS software.
4. Choose to verify a subcontractor and enter the details. Yours, then theirs. You can verify several subcontractors in one go.
5. Write down the verification number and the rate. Keep them with that subcontractor’s records. The rate is what you deduct from now on.
6. Pay them at that rate. Work the deduction out on the labour, after materials come off, and give them a payment and deduction statement.

If the service is not working, GOV.UK warns: Online services may be slow during busy times. HMRC lists current problems on its CIS service availability page.

What rate will HMRC tell me to deduct?

One of three, and you use the one HMRC gives you, whatever the subcontractor’s invoice says:

• 20% if they are registered and HMRC matched them. HMRC calls this the standard rate.
• 30% if they are not registered or HMRC could not match the details. This is the higher rate.
• 0% if they hold gross payment status, so you pay them in full.

Rates from HMRC’s CIS manual, CISR71020. How CIS deductions work

What is a CIS verification number?

It is the reference HMRC gives you when you verify. The verification reference number will be the same for each subcontractor that we’ve verified at the same time.

Where HMRC cannot match someone, their number gets letters on the end. If it’s not possible to verify a subcontractor, we’ll add one or two letters to the end of the number so that it’s unique to that subcontractor. In HMRC’s own example, the number is V0004528765/A.

You only need the number on your monthly return and on the subcontractor’s statement when you deducted at the higher rate. CIS340: Contractors must make a note of the reference numbers given and must enter them on their monthly return alongside the entries for each subcontractor from whom deductions at the higher rate have been made. It is not needed for anyone else: Contractors do not need to show this reference on monthly returns or subcontractors’ payment statements where deductions have been made at the standard rate or where the subcontractor has been paid gross.

When do I need to verify a subcontractor again?

Only when you have not put them on a CIS return for a while. GOV.UK: You must also verify subcontractors you’ve used before if you have not included them on a CIS return in the current or last 2 tax years.

For example, in the 2026 to 2027 tax year the window covers 2026 to 2027, 2025 to 2026 and 2024 to 2025. A subcontractor you last put on a return in 2023 to 2024 is outside it, so you verify them again before you pay them. Tax years run from 6 April to 5 April.

Inside the window, you carry on as before: CIS340 says they must pay the subcontractor on the same basis as the last payment made to them, unless HMRC has told you otherwise.

What happens if HMRC cannot match a subcontractor?

You deduct at the higher rate, 30%. CIS340: Without this information, we may be unable to identify the subcontractor when the contractor attempts to verify them. When this happens, we’ll tell the contractor to make deductions at the higher rate from any payments to the subcontractor.

On £1,000 of labour, that is £300 taken off instead of £200. The subcontractor is not out of pocket for good: they claim the deductions back against their tax, and The subcontractor will need this reference number later when seeking credit for any of the deductions made.

The usual fix is the details. HMRC expects the subcontractor to give you their legal name, as registered on our computer system, together with their UTR. Check what you sent against that, and if they are not registered at all, point them to how to register as a subcontractor.

What if HMRC changes a subcontractor’s rate?

HMRC writes to you, and you switch from the date it gives. Until then, CIS340 says the contractor should continue to pay the subcontractor in the same way until we tell them about any change.

When a subcontractor loses gross payment status after a review, We’ll give contractors 35 days’ notice of the change. Since 6 April 2026, HMRC can also cancel gross payment status straight away where a business knew or should have known it was in a supply chain connected with fraud. How gross payment status is won and lost

Other questions about verifying